LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SECOND SEMESTER – APRIL 2011
CO 2104/2101 - FINAN.A/C & FINANCIAL STATEMENT ANALYSIS
Date : 09-04-2011
Time : 1:00 - 4:00
Dept. No.
Max. : 100 Marks
SECTION A
Answer all the questions:
(10 X 2 = 20 marks)
1. a. Ideal current ratio for a concern is ______________
b. Cost of goods sold = Net sales _____________
2. Calculate the tax provided during the year from the following information:
At the beginning of the year the Provision for taxation stood at Rs.25,000
At the end of the year the Provision for taxation stood at Rs. 30,000
Tax paid for the current year Rs. 40,000
3. Compute profit or loss on sale of machinery
Original cost of Machinery Rs. 1,20,000;
Accumulated depreciation Rs. 49,000; Sale value of Machinery Rs. 75,000
4. Who is a petty cashier?
5. What is Bank overdraft?
6. State whether the following expenditures are capital or revenue:
a. Amount spent on heavy advertising to introduce a new product in the market
b. Amount spent on making a few more exits in a Cricket ground to comply with
Government orders.
7. Classify the following accounts into personal/real/nominal
a. Salaries
b. Goodwill
c. Interest received
d. State Bank of India
8. What is a Balance sheet?
9. Give any two uses of ratio analysis.
10. Calculate working capital turnover ratio.
Sales Rs.7,50,000
Current assets Rs. 4,00,000
Current liabilities Rs. 2,50,000
SECTION B
Answer any five questions:
(5 X 8 = 40 marks)
11. Who are the users of accounting information ? Explain the usefulness of accounting
information from their angle.
12. What are the uses and limitations of Cash flow analysis?
13. What is the accounting treatment of following items by a non-profit organization.?
a. Specific donation
b. Life Membership fees
c. Legacy
d. Honorarium
14. Enter the following in a Petty cash book . The petty cashier started with an imprest amount
of Rs. 1,000 on 1st January2011
Jan
Rs.
2
For window cleaning
50
5
One bundle of A4 sheet
100
7
Taxi fare to manager
75
9
Advertisement in Times of India
25
15
Railway fare to Salesman
125
20
Polishing office table
200
22
Paid for printing
26
25
Purchase of postage stamps
18
15. From the following particulars, determine the maximum remuneration available to a full
time director of a manufacturing company.
The Profit & Loss Account of the company showed a net profit of Rs. 40,00,000 after
taking into account the following items:
Rs.
(a) Depreciation ( including special depreciation of Rs. 40,000)
1,00,000
(b) Provision for income tax
2,00,000
(c) Capital expenditure
5,00,000
(d) Donation to political parties
50,000
(e) Ex-gratia payment to worker
10,000
(f) Capital profit on sale of assets
15,000
st
16. Prepare a Bank reconciliation statement as at 31 August 2010
The bank balance as per cash book Rs. 30,000
a. Cheque for Rs. 5,000 was credited direct to the account but omitted to be recorded
in the cash book
b. Out of cheques amounting to R.3,700 drawn , cheques amounting to
Rs. 1,300 only are encashed.
c. Bank charges amounting to Rs. 200 not entered in the cash book
d. Bankers collected interest from investments Rs. 1,000
e. A customer paid directly a cheque for Rs. 300 into the account
f. As per the standing instructions the Bank paid the telephone bill Rs.1,000
17. After taking into account the under mentioned items of Raja ltd it made a net profit of Rs.
1,00,000 for the year ended 31sr Dec 2010:
Rs.
Loss on sale of machinery
10,000
Depreciation on building
4,000
Profit on sale of building
8,000
Income tax refund
3,000
Preliminary expenses written off
5,000
Provision for taxation
10,000
Goodwill written off
5,000
Calculate operating profit before working capital changes.
18. Calculate the amount of subscription and stationery to be shown in the Income and
Expenditure account.
a. Subscriptions received during the year 2009-10 is as follows:
(2008-09 Rs. 2,000: 2009-10 Rs. 30,000: 2010-11 Rs. 3000)Rs 35,000
Subscription outstanding as on 31st March 2009 were Rs. 3,500
Subscription outstanding as on 31st March 2010 were Rs. 2,000
Advance Subscription as on 31st March 2009 were Rs. 6,000
b. Calculate the amount of stationery to be shown in the Income and Expenditure account.
Stock of stationery on 31-3-2010
Rs. 400
Stock of stationery on 31-3-2011
Rs. 500
Stationery purchased during the year Rs. 1,000
SECTION C
Answer any two questions:
(2 X 20 = 40 marks)
19. From the following transactions prepare a Triple column cash book of Anand for the
month of August 2010:
Aug
Rs.
1
Cash balance
20,000
Bank balance
25,000
5
Paid rent by cheque
5,000
7
Purchased goods from Charles for credit
20,000
10
Deposited into bank
10,000
12
Returned goods to Charles
1,000
14
Withdrew from bank for office use
1,000
16
Paid cheque to Charles in full settlement
8,950
20
Withdrew cash from bank for celebrating his birthday
5,000
22
Paid salaries by cheque
10,000
26
Suresh, a customer paid directly into bank
5,000
28
Paid for advertisement
1,000
29
Cash sales
7,000
20. From the following Trial Balance , Prepare final accounts for the year ended 31st March
2011
Trial Balance
Name of the account
Debit
Name of the account
Credit
Balances
Balances
Purchases
Debtors
Return inwards
Furniture
Rent
Salaries
Travelling expenses
Cash
Stock
Discount allowed
Drawings
11,870
7,580
450
2,750
360
850
300
210
2,450
40
600
27,460
Capital
Bad debts recovered
Creditors
Return outwards
Bank overdraft
Sales
Bill payable
8,000
250
1,250
350
1,570
14,690
1,350
_______
27,460
Additional information:
(i)
The closing stock on 31-3-2011 was Rs. 4,200
(ii)
Write off Rs. 80 as bad debts
(iii) Create a reserve for bad debts at 5% on sundry debtors
(iv) Three months rent is outstanding
(v)
Depreciate furniture @ 10%
21. From the following information, prepare Balance sheet with as many details as possible:
Stock turnover ratio 6 times
Capital turnover ratio (on cost of sales) 2 times
Fixed assets turnover ratio (on cost of sales)
4 times
Gross profit ratio
20%
Debtor’s velocity
2 months
Creditor’s velocity
73 days
Gross profit in a year amounts to Rs. 60,000. Reserves & surplus amount to Rs. 20,000.
Closing stock of the year is Rs. 5,000 more than the opening stock
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CO 2104 - Loyola College